Shell’s “highly-attractive” Jerun field investment offshore Malaysia to contribute to LNG goals following first gas production

(WO) – On July 10^th, World Oil reported that the Jerun field in Malaysia, operated by SapuraOMV Upstream Sdn Bhd, has achieved first gas production. Shell plc has a 30% equity stake in the field, through its Malaysian subsidiary, Sarawak Shell Berhad, and made a final investment decision on the development in 2021.

The field is located around 160 km northwest of Bintulu in Sarawak, and 190 km north-west of Miri, Sarawak, Malaysia. Comprising an integrated central processing platform, Jerun will export gas through a new 80-km pipeline into the E11RB production hub, for onward delivery to Bintulu based customers including Malaysia LNG.

The Jerun platform is designed to produce up to 550 MMcfgd, with condensate production of 15,000 bpd during peak production.

“Jerun was a highly attractive investment for Shell, building on our interests in this important region off the coast of Sarawak, offshore Malaysia, where Shell operates the Timi platform and has the Rosmari-Marjoram project under construction,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.

The Jerun gas field was discovered in 2015, under the SK408 production sharing contract.

On Shell’s Capital Market Day in 2023, Shell committed to deliver upstream and integrated gas projects coming on stream between 2023 to 2025, with a total peak production of greater than 500,000 boed. Jerun is expected to contribute to this commitment.

Global demand for LNG is estimated to rise by more than 50% by 2040, as industrial coal-to-gas switching gathers pace in China, South Asian and South-east Asian countries. These countries are expected to use more LNG to support their economic growth, according to Shell’s LNG Outlook 2024.

Shell believes LNG will play a critical role in the energy transition, replacing coal in heavy industry. It also has a continued role in displacing coal in power generation, helping to reduce local air pollution and carbon emissions.

“Gas is an important fuel for Malaysia and the world, providing a secure form of energy for heating, cooling and power generation. We are delighted the venture has reached this milestone,” Yujnovich concluded.

Jerun is operated by SapuraOMV Upstream (40%) in partnership with Sarawak Shell Berhad (30%) and PETRONAS Carigali Sdn Bhd (30%).